It depends on the volume of the stock in question. Lower volume will lead to a higher bid-ask spread, which will mean that if you want to fill the contract, you’re most likely going to have to pay the ask price, even if it’s significantly higher than the valued market price. But if you’re confident in your beliefs, don’t let pennies on the dollar stop you from placing trades. Maybe I’m just saying that because I made 100x off $20 🤷♂️
Smaller cap and lesser known stocks will have a limited options market in terms of volume, so if there’s nobody to buy/sell you the contract, you’re out of luck. Choose the stocks/tickers you play wisely, and at the right time.
If someone had $10M invested in SPY puts this afternoon, and wanted to get out at, say, 3pm with a market order....is it possible they wouldn't have been able to? Or you just mean they would have gotten out but not at the exact price they would have preferred?
As long as it’s within the time frame of regular market hours, I am sure SPY would be able to handle such volume and there would be traders on the other side to purchase the shares. However, the limit price would need to be set below the market price, as 10M is a lot of capital leaving all at once. Then again, SPY has the most volume out of any etf, and a market order of that size would likely go through.
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u/Ron3k 1d ago
It depends on the volume of the stock in question. Lower volume will lead to a higher bid-ask spread, which will mean that if you want to fill the contract, you’re most likely going to have to pay the ask price, even if it’s significantly higher than the valued market price. But if you’re confident in your beliefs, don’t let pennies on the dollar stop you from placing trades. Maybe I’m just saying that because I made 100x off $20 🤷♂️
Smaller cap and lesser known stocks will have a limited options market in terms of volume, so if there’s nobody to buy/sell you the contract, you’re out of luck. Choose the stocks/tickers you play wisely, and at the right time.